Listen up, Mr. Trudeau, the best economist in the world just trashed the TPP

“The idea is to roll back the Enlightenment and restore feudalism,” says Dr. Michael Hudson of TPP.

No 1608 Posted by fw, March 04, 2016

“Michael Hudson is the best economist in the world. Indeed, I could almost say that he is the only economist in the world. Almost all of the rest are neoliberals, who are not economists but shills for financial interests.” —Paul Craig Roberts (Source: The West is Traveling the Road to Economic Ruin, by Paul Craig Roberts, February 1, 2016)

Michael Hudson

“The cover story is not really trade at all. The cover story is to force privatization, to reverse what was central to the whole Progressive Era. For the last 300 years, the assumption of Europe and North America was that you were going to have a mixed economy, with the government investing in infrastructure, in roads, in transportation, communications, water and sewer, energy. The job of the government… infrastructure was to provide these basic needs at minimum cost in order to make a low-cost, competitive economy. That’s how America got rich. That’s how Germany industrialized, it’s how Europe did. The aim of the Trans-Pacific Partnership is essentially to dissolve governments and to say the entire economy should be owned and operated by private owners, private enterprise, for short-term profit.” —Dr. Michael Hudson

Here are a few more of Dr. Hudson’s gems excerpted from a February 3, 2016 interview:

I could give a glib answer and say the aim is to reduce the population by 50%, to starve people, abolish pensions and spread poverty. That actually is the effect.

The aim of the Trans-Pacific Partnership is essentially to dissolve governments and to say the entire economy should be owned and operated by private owners, private enterprise, for short-term profit.

Essentially, the new buyers of the roads, the water systems, the sewer systems, can use these as rent extraction opportunities. That means they can somehow charge whatever the market will bear

So essentially rentier interests have backed the kind of junk economics that has fought back classical economics, against the Progressive Era and against social democracy, to create a very right-wing government that they call free trade, in a kind of Orwellian doublethink.

An edited transcript of the interview was subsequently published by counterpunch. To read it, click on the following linked title. Alternatively, read below my excerpted repost, which focuses solely on Dr. Hudson’s blistering critique of the Trans-Pacific Partnership deal. My repost is truer to Hudson’s actual words than counterpunch’s more polished article, featuring added updated details. The subheadings in the repost are mine.

Guns + Butter interviewer Bonnie Faulkner: What is the aim of the Trans-Pacific Partnership Treaty and how is it at odds with the Asian Infrastructure Bank, the AIIB?

The effect of the TPP will be “to reduce the population by 50%, to starve people, abolish pensions and spread poverty”

Michael Hudson: I could give a glib answer and say the aim is to reduce the population by 50%, to starve people, to abolish pensions and spread poverty. That actually is the effect.

The TPP’s real agenda “is to force privatization and disable government regulation”

The cover story is not really trade at all. The cover story is to force privatization, to reverse what was central to the whole Progressive Era. For the last 300 years, the assumption of Europe and North America was that you were going to have a mixed economy, with the government investing in infrastructure, in roads, in transportation, communications, water and sewer, energy. The job of the government… infrastructure was to provide these basic needs at minimum cost in order to make a low-cost, competitive economy. That’s how America got rich. That’s how Germany industrialized, it’s how Europe did.

TPP’s aim is dissolve governments, to say the entire economy should be owned and operated by private owners, private enterprise, for short-term profit

The aim of the Trans-Pacific Partnership is essentially to dissolve governments and to say the entire economy should be owned and operated by private owners, private enterprise, for short-term profit.

Related aims include: to nullify environmental protection, to nullify protection of labor, and to nullify attempts to tax natural resources or economic rent

There are a number of aims, One is to nullify any domestic environmental protection that costs money, to nullify any domestic protection of labor, to nullify any domestic attempt to tax natural resources or to tax economic rent. The idea is to turn the roads and the transport system into toll roads that will be owned by foreigners and run at a high charge. To turn the Internet, to turn the water system into toll systems, to charge for water, to charge for basic needs, and all of a sudden to impose really what is very much a neo-feudalism, rentier economy throughout the world. of taking over the government sector essentially by the the finance, industrial and real estate sector — the FIRE sector.

“The idea is to roll back the Enlightenment and restore feudalism”

So you could say the idea is to roll back the Enlightenment and restore feudalism. That sounds like an extreme statement, but people don’t realize how radical the investment agreements are. And any country that will try, for instance, to — when Australia fined Philip Morris by raising the charges on cigarettes, Philip Morris sued Australia. So Australia, the government has to pay Philip Morris the amount of money that Philip Morris would have made if people would have continued to smoke and get cancer at the existing rate.

No TPP member government will be free to regulate the environment or to enact new taxes on rent-seeking or other private enterprise

When Ecuador tried to sue oil companies for pollution, the oil companies sued, and the country has to pay the oil company the amount of profit it would make if it continued to produce oil by polluting the land to an infinite degree. No government anywhere in the world that signs this will be free to regulate the environment, or to tax private enterprise.

Corporate owners of infrastructure will be able to charge whatever user fees the market will bear

Essentially, the new buyers of the roads, the water systems, the sewer systems, can use these as rent extraction opportunities. That means they can somehow charge whatever the market will bear, and treat foreign countries sort of like New York City cable customers are treated. I live in Forest Hills in Queens. We have one supplier, Time Warner Cable. If I want cable, I have to pay what they charge, and it has nothing to do at all with the cost of production.

“Economic rent” is “unearned income” above the cost of production or cost of purchase

That’s what economic rent is. It’s a revenue above the cost of production. For hundreds of years the economics of Adam Smith, David Ricardo, John Stuart Mill and Thorstein Veblen were all about how to create an economy that would produce everything it would cost without any free lunch, without any kind of unearned income.

TPP’s aim is to promote unearned rent extraction

The aim of the Trans-Pacific Partnership and the European version is to realize — wait a minute, the economy’s all about rent income. We want to be able to get economic rent. So essentially rentier interests have backed the kind of junk economics that has fought back classical economics, against the Progressive Era and against social democracy, to create a very right-wing government that they call free trade, in a kind of Orwellian doublethink.

Bonnie Faulkner: Have these rulings by the World Trade Organization against these countries that you mentioned — Australia was one — have these been enforced?

It’s almost impossible for small countries to afford the legal fees to defend themselves against corporations

Michael Hudson: I don’t know the details. For one thing, the first process of enforcement is to spend up to a hundred million dollars in legal fees. It’s almost impossible for a poor government, like say Ecuador, or even Australia to spend the legal fees that it cost to defend. Secondly, the decisions are made outside of government; they’re made by — the decisions as to how much governments have to pay corporations that are regulated, is compensation damages, are made by a small group of referees that are sort of a revolving door between acting as referees and working as lobbyists for these corporations. I believe they were enforced in Australia. I don’t know any of the specific day-to-day details.

Michael Hudson is research professor ofeconomicsatUniversity of Missouri, Kansas City(UMKC) and a research associate at theLevy Economics InstituteofBard College. He is a former Wall Streetanalyst and consultant as well as president of the Institute for the Study of Long-term Economic Trends (ISLET).